Adlam v Accident Compensation Corporation
[2017] NZCA 457
•16 October 2017 at 3 pm
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| IN THE COURT OF APPEAL OF NEW ZEALAND |
| CA442/2016 [2017] NZCA 457 |
| BETWEEN | JEREMY CAMERON ADLAM |
| AND | ACCIDENT COMPENSATION CORPORATION |
| Hearing: | 6 April 2017 |
Court: | French, Cooper and Asher JJ |
Counsel: | H G de Groot for Appellant |
Judgment: | 16 October 2017 at 3 pm |
JUDGMENT OF THE COURT
AThe application to adduce further evidence is granted.
BWe answer question (a) of the case stated as follows:
Was the High Court correct to find that a failure to treat cannot occur in circumstances where there are no indications for a different treatment course?
Yes.
C The appeal is dismissed.
___________________________________________________________________
REASONS OF THE COURT
(Given by Cooper J)
Introduction
Section 20(1) of the Accident Compensation Act 2001 (the Act) provides cover under the Act for personal injury suffered in New Zealand on or after 1 April 2002. To be covered, the injury sustained must be a personal injury of a defined kind (here, a physical injury)[1] and the injury must be described in one of the paragraphs of s 20(2).
[1]Accident Compensation Act 2001, s 26(1)(b).
Section 20(2)(b) refers to personal injury that is “treatment injury” suffered by the person. This appeal requires the Court to consider what is meant by the term “treatment injury”. That necessitates an examination of both the definition of “treatment injury” in s 32 of the Act and the definition of “treatment” in s 33, which includes a failure to provide treatment or to provide it in a timely manner.[2]
[2]Accident Compensation Act, s 33(1)(d).
The case comes to this Court as an appeal by way of case stated on questions of law under s 163(1) of the Act. The issues have earlier been considered by the High Court,[3] and the District Court.[4] The High Court allowed an appeal by the Accident Compensation Corporation (ACC), overturning the District Court’s decision that there was cover under the Act for treatment injury. Before turning to the questions and the relevant statutory provisions we set out the facts as recited in the case stated by the High Court.
Facts
[3]Accident Compensation Corporation v Adlam [2016] NZHC 1487, [2016] 3 NZLR 497.
[4]Adlam v Accident Compensation Corporation [2015] NZACC 230. The District Court heard an appeal under s 149 of the Act against a review decision.
The facts stated by Gendall J are as follows:
(a)The appellant, Jeremy Adlam, is now aged 16 years. He was born on 20 March 2000. Immediately prior to his birth by emergency caesarean section he suffered a neurological injury described as intra-partum hypoxia which later caused severe cerebral palsy. Prior to that event, the appellant was a healthy, viable child.
(b)The appellant suffers marked neurocognitive disability which affects every area of his daily living, including deficits in terms of mobility, upper extremity function, swallowing and fatigue. His mother acts as his full-time carer.
(c)During her pregnancy with the appellant, his mother, Mrs Kym Adlam, was hospitalised at 27 weeks gestation as a result of spontaneous and premature rupture of her membranes. She was transferred as an in-patient to National Women’s Hospital in Auckland where she was seen by a paediatric registrar and her condition was stabilised. From that point on, her pregnancy and the foetal condition were closely monitored.
(d)Over the next four weeks, Mrs Adlam remained at National Women’s Hospital. During this time, she appeared to be clinically well and was reacting appropriately to cardiotocography (CTG) tracing. There was no evidence of uterine activity, chorioamnionitis, or pre-term labour. She was transferred to New Plymouth Hospital near her home where she was seen by a specialist obstetrician. The plan was for her to deliver at 34 weeks gestation.
(e)On 17 March 2000, a doctor at New Plymouth Hospital noted that all recordings were normal and the foetus was in the cephalic (head down) position.
(f)On 20 March 2000, Mrs Adlam spontaneously developed contractions with increased discharge of liquor. At first, a CTG showed good variation with one late deceleration. At 1.00 pm that day, Mrs Adlam was reviewed and noted as being 0.5 cm dilated and possibly in early labour. The foetal heart rate was monitored over the course of the afternoon.
(g)At 5.35 pm, it was noted that Mrs Adlam’s temperature had increased. She was placed on IV antibiotics. Between 6.45 pm and 6.50 pm that night the foetal heart rate had decreased to 95–100 beats per minute. At that point a decision was made to perform an emergency caesarean section. Mrs Adlam was taken to theatre at 7.00 pm. Anaesthesia was administered at 7.15 pm.
(h)The appellant was delivered at 7.34 pm. At birth his Apgar scores were six at five minutes and eight at 10 minutes and his initial blood gases were suggestive of peripartum asphyxia. He was transferred to a neonatal unit where he was noted to have poor muscle tone, decreased reflexes, low blood pressure and poor saturation levels.
(i)In the District Court, Judge MacLean found the appellant had suffered a treatment injury. In making that finding, however, Judge MacLean reached the clear conclusion that, once it became apparent at New Plymouth Hospital that the foetal condition was compromised, Mrs Adlam’s treatment providers acted as quickly as possible. Judge MacLean accepted that the caesarean was only appropriate when fever became apparent. The Judge held that “it is unrealistic to conclude that those actions could safely have been done any faster or that they were not done in a timely way”.
(j)The District Court decision therefore found that the appellant was entitled to cover despite the fact that first, there were no observable indications prior to the fever that warranted medical intervention, and secondly, that the only basis on which treatment injury was established was through objective hindsight.
(k)Had a caesarean been performed earlier, it is likely that the appellant would not have suffered personal injury.
(l)There were no indications for a different treatment course in the circumstances.
(Footnote omitted.)
The questions of law
In his substantive judgment overturning the District Court decision, Gendall J answered two questions of law in the negative. They were:[5]
(a)Can a “failure to treat” occur in circumstances where there are no observable indications for a different treatment course?
(b)Does a treatment injury occur where, with the benefit of objective hindsight, a different course of treatment could have yielded a better result?
[5]Accident Compensation Corporation v Adlam, above n 3, at [8] and [64].
In the decision granting leave to appeal, the Judge accepted that the following questions of law would appropriately be asked of this Court:[6]
(a)Was the High Court correct to find that a “failure to treat” cannot occur in circumstances where there are no indications for a different treatment course?
(b)Was the High Court correct to find that a treatment injury does not occur where, with the benefit of objective hindsight, a different course of treatment could have yielded a better result?
(c)Was the High Court correct to find that “some form of responsibility for either a failure to provide treatment or the provision of treatment must be established on the balance of probabilities in order for a claimant to receive cover”?
(d)Was the High Court correct to find that “determining whether a particular treatment is clinically indicated necessarily requires consideration of the alternative option or options available to the health professional, given the state of knowledge at the time, and whether there were contra indications telling against those alternatives?
[6]Adlam v Accident Compensation Corporation [2016] NZHC 1967 at [21].
As Mr de Groot submitted for the appellant, a single issue underlies all four questions, namely what is the meaning of the words “a failure to provide treatment, or to provide treatment in a timely manner” in s 33(1)(d) of the Act. For reasons to be discussed the appellant contends that: “failure” should be taken to mean failure simpliciter; to establish a causative failure it need only be shown that an available treatment could have been given in an attempt to avoid or mitigate the personal injury suffered; and if given the treatment would, on the balance of probabilities, have avoided or mitigated the personal injury.
Whether the appellant is correct turns on an analysis of the text of the relevant statutory provisions, considered in the light of their purpose.[7] In determining purpose, regard must be had to both the immediate and general legislative context, and any relevant social or other objective of the enactment.[8]
[7]Interpretation Act 1999, s 5(1).
[8]Commerce Commission v Fonterra Co-operative Group Ltd [2007] NZSC 36, [2007] 3 NZLR 767 at [22].
The consequences of that approach to this Act was summarised by McGrath J in a well-known passage in Harrild v Director of Proceedings:[9]
[130] The policy of successive accident compensation statutes in New Zealand, including the 2001 Act, has been to provide compensation for persons suffering personal injury without requiring that they show fault to establish their entitlement. The legislative bar to suits at common law is the consequence of the universal nature of coverage under the legislation. A “generous, unniggardly interpretation” of what was personal injury by accident under earlier accident compensation legislation was seen by this Court as in keeping with that legislative policy: Accident Compensation Corporation v Mitchell [1992] 2 NZLR 436 at 438 per Richardson J. I regard that approach to interpretation as unaffected by the narrower approach to defining personal injury since the 1992 Act … .
The relevant statutory provisions
[9]Harrild v Director of Proceedings [2003] 3 NZLR 289 (CA).
As noted above, the combination of s 20(1) and 20(2)(b) provides cover for physical injury that is “treatment injury”. That term is defined in s 32(1) of the Act as follows:
32 Treatment injury
(1) Treatment injury means personal injury that is—
(a) suffered by a person—
(i) seeking treatment from 1 or more registered health professionals; or
(ii)receiving treatment from, or at the direction of, 1 or more registered health professionals; or
(iii) referred to in subsection (7); and
(b) caused by treatment; and
(c)not a necessary part, or ordinary consequence, of the treatment, taking into account all the circumstances of the treatment, including—
(i)the person’s underlying health condition at the time of the treatment; and
(ii) the clinical knowledge at the time of the treatment.
In addition, s 32(2) and (3) provide:
(2)Treatment injury does not include the following kinds of personal injury:
(a)personal injury that is wholly or substantially caused by a person’s underlying health condition:
(b)personal injury that is solely attributable to a resource allocation decision:
(c)personal injury that is a result of a person unreasonably withholding or delaying their consent to undergo treatment.
(3)The fact that the treatment did not achieve a desired result does not, of itself, constitute treatment injury.
Section 33(1) defines “treatment” as follows:
33Treatment
(1)For the purposes of determining whether a treatment injury has occurred, or when that injury occurred, treatment includes—
(a) the giving of treatment:
(b) a diagnosis of a person’s medical condition:
(c)a decision on the treatment to be provided (including a decision not to provide treatment):
(d)a failure to provide treatment, or to provide treatment in a timely manner:
(e)obtaining, or failing to obtain, a person’s consent to undergo treatment, including any information provided to the person (or other person legally entitled to consent on their behalf if the person does not have legal capacity) to enable the person to make an informed decision on whether to accept treatment:
(f) the provision of prophylaxis:
(g)the failure of any equipment, device, or tool used as part of the treatment process, including the failure of any implant or prosthesis (except where the failure of the implant or prosthesis is caused by an intervening act or by fair wear and tear), whether at the time of giving treatment or subsequently:
(h)the application of any support systems, including policies, processes, practices, and administrative systems, that—
(i)are used by the organisation or person providing the treatment; and
(ii) directly support the treatment.
As we have noted, the key provision to be construed in this case is s 33(1)(d). On the facts set out in the case, the issue is whether there was a failure to provide treatment in circumstances where a caesarean section could have been performed at an earlier point, but it was in fact not then indicated. The question turns on whether “failure” in this context should be construed as meaning not doing something that should have been done or whether it means simply not doing something that could have been done. The distinction is exemplified by different meanings of “failure” given in The Oxford English Dictionary: “[a] failing to occur, be performed, or be produced” and “an omitting to perform something due or required; default”.[10]
Appellant’s argument
Text
[10]JA Simpson and ESC Weiner (eds) The Oxford English Dictionary (2nd ed, Oxford University Press, Oxford, 1989) at 667.
Mr de Groot’s primary argument was that the word “failure” should be construed to mean failure simpliciter, or non-occurrence, without any connotation of departure from a standard. He submitted this was the meaning to be derived from the plain language of s 33(1)(d) itself, as well as being consistent with other uses of the word “failure” in the statute. He contrasted s 33(1)(d) with the following provisions in the Act that employ the word in conjunction with a statement of a relevant standard:
(a)s 158(3), which refers to the “failure of an assessor to perform his or her duties”, those duties being set out in s 158(1);
(b)s 179(1)(e), which uses the expression “failure to reach the standard required by the audit”, in provisions dealing with the Act’s regime for the upward adjustment of levies;
(c)s 242(1), which refers to intentional failure to deliver statements, documents and other information required by s 241 of the Act (these are statements or estimates of earning required by ACC in relation to levies);
(d)s 249(1)(a), which provides for a penalty in the case of an overpayment made as a result of a “failure by the person to inform the Corporation” of matters “that the person ought to have known” were relevant to the payment;
(e)s 316(2), which provides that a person may not be convicted of an offence under subs (1)(a) (knowingly not making a deduction required to be made under s 221) if the person satisfies the court that the amount of the required deduction has been paid and that the “failure to make payment of the deduction within the prescribed time was due to illness, accident, or other cause beyond the person’s control”; and
(f)s 344(2), which provides for the imposition of administrative sanctions on insurers “in respect of any failure to comply with the insurer’s obligations under the 1998 Act”.[11]
[11]The reference is to the Accident Insurance Act 1998: Accident Compensation Act, s 341(1), definition of “1998 Act”.
Mr de Groot also referred to other statutory examples of the word “failure” being used with respect to specified standards in the Corrections Act 2004 and the Crimes Act 1961. He sought to contrast these provisions with others where the word failure appeared without reference to standards, so as to connote simply the non‑occurrence of the fact. As an example, he referred to s 58(1) of the Act, which provides that a claimant must be regarded as having a decision by the ACC that he or she has cover for a personal injury in respect of which a claim was made when “the Corporation fails to comply with a time limit under section 56 or section 57”.
Mr de Groot similarly made reference to the heading of s 296, “Failure to reach agreement”, and to s 317(7), which says that nothing in that section is affected by, amongst other things, “the failure or refusal of any person to lodge a claim for personal injury” covered by the Act.[12]
[12]Section 317(1) provides that there can be no damages claimed for personal injury covered by the Act brought independently of the Act.
Mr de Groot submitted that these provisions demonstrate that the word “failure” can have two distinct meanings in statutory provisions depending on context: simply not doing something, and a failure to comply with a standard. He argued that if Parliament had intended s 33(1)(d) of the Act to imply a normative test, there would have been a reference to some sort of standard in the provision. That had not been done in s 33(1)(d), nor in the case of para (g), which speaks simply of the “failure of any equipment, device, or tool”.
Mr de Groot bolstered these arguments by reference to the definition of “failure” in The New Zealand Oxford Dictionary, focusing on two of the meanings given, namely “non-performance, non-occurrence” and “breaking down or ceasing to function (heart failure; engine failure; computer failure)”.[13] He referred also to other contexts in which “failure” has been treated as not importing any notion of fault.
[13]Tony Deverson and Graeme Kennedy (eds) The New Zealand Oxford Dictionary (Oxford University Press, Melbourne, 2008) at 381.
In summary, while conceding that failure can imply departure from a standard, Mr de Groot submitted that where the word is used in the Act on its own without any reference to a standard it should not be treated as requiring departure from a standard.
Purpose
Mr de Groot supported his interpretation of “failure” by reference to the history and purpose of the accident compensation legislation and the non-fault policy underpinning it. He referred to the 1967 report of the Royal Commission of Inquiry, Compensation for Personal Injury in New Zealand, also known as the Woodhouse Report.[14] He noted the Commission’s intention that the scheme:[15]
… provide immediate compensation without proof of fault for every injured person, regardless of his or her fault, and whether the accident occurred in the factory, on the highway, or in the home.
[14]Royal Commission of Inquiry Compensation for Personal Injury in New Zealand (Report, December 1967).
[15]At [18].
When it was first enacted, the Accident Compensation Act 1972 had provided that “cover” would exist for “personal injury by accident” but was shortly thereafter amended to make it clear that the physical or mental consequences of injury or accident were also covered, together with “medical, surgical, dental, or first aid misadventure”. The expression “medical … misadventure” was not defined, but was developed in case law to a position summarised by this Court in Childs v Hillock, which approved the following four propositions:[16]
(1) Medical negligence or medical error is medical misadventure.
(2)A totally unforeseen adverse consequence of medical treatment is medical misadventure.
(3)An adverse consequence of such treatment which is within the normal range of medical or surgical failure attendant upon such treatment is not medical misadventure.
(4)An adverse consequence of such treatment which is outside the normal range of medical or surgical failure attendant upon such treatment is medical misadventure.
[16]Childs v Hillock [1994] 2 NZLR 65 (CA) at 72.
Professor Todd regarded Childs v Hillock as confirming a two-limb approach developed by the Courts, asking whether there had been either medical negligence or medical mishap. He considered the judgment acknowledged the need to differentiate between patients who were covered for compensation and patients who were simply receiving medical treatment because they were ill. Some unexpected or “accident‑like” event was required to remove the case from the category of sickness or disease (not covered) into the category of medical misadventure (for which there was cover).[17]
[17]Stephen Todd “Treatment Injury in New Zealand” (2011) 86 Chi-Kent LRev 1169 at 1186–1187.
The approach developed by the courts was reflected in the enactment of the Accident Rehabilitation and Compensation Insurance Act 1992, in which s 5 defined “medical misadventure” (as meaning personal injury resulting from medical error or medical mishap), “medical error” and “medical mishap”. “Medical error” was defined as follows:
“Medical error” means the failure of a registered health professional to observe a standard of care and skill reasonably to be expected in the circumstances. It is not medical error solely because desired results are not achieved or because subsequent events show that different decisions might have produced better results.
“Medical mishap” was defined as an adverse consequence of treatment properly given if the likelihood of the adverse consequence of the treatment occurring was rare and the adverse consequence of the treatment was severe.
Definitions of these terms were again found in the Accident Insurance Act 1998 and the Injury Prevention, Rehabilitation, and Compensation Act 2001 (the current Act before it was renamed), where they applied until 30 June 2005. The Injury Prevention, Rehabilitation, and Compensation Amendment Act (No 2) 2005, in force relevantly from 1 July 2005, then added the provisions concerning treatment injury and treatment that currently apply.[18]
[18]There is one exception in that a new s 34(5) dealing with claims based on medical misadventure (prior to 1 July 2005), which was added by s 4 of the Accident Compensation Amendment Act (No 2) 2013 with effect from 5 December that year. That amendment is not relevant here.
As Mr de Groot submitted, the 2005 amendment followed a comprehensive review of the previous statutory provisions concerning medical misadventure. The review was heralded by a 2003 publication, Review of ACC Medical Misadventure: Consultation Document.[19] The executive summary of that document referred to the fact that people are sometimes unintentionally injured when receiving treatment. It recorded that the Act’s provisions for medical misadventure had been reviewed by government agencies and said:[20]
The review has found that the ACC medical misadventure process generally works well in comparison to the few countries that have equivalent schemes, and is a superior alternative to seeking remedies through the Courts. The review has identified that claimants and health professionals see the current medical misadventure criteria … to be unfair, confusing and arbitrary. …
To improve ACC’s responsiveness to claimants and to move towards a fairer system, the review has suggested that the current requirement to establish fault for individual health professionals should be removed from the legislative provisions.
[19]Ruth Dyson Review of ACC Medical Misadventure: Consultation Document (Accident Compensation Corporation, 2003).
[20]At 2.
The explanatory note for what was to become the Injury Prevention, Rehabilitation, and Compensation Amendment Act (No 2) included the statement that:[21]
The cover provisions no longer distinguish between error and mishap, but simply refer to “treatment injuries”. Treatment injuries are ones that result from the treatment, not the underlying condition of the patient. The provisions do not require ACC to make any findings of fault and, in this sense, it [sic] is consistent with the no-fault nature of the scheme generally.
[21]Injury Prevention, Rehabilitation, and Compensation Amendment Bill (No 3) (165-1) (explanatory note) at 3.
Mr de Groot also referred us to a statement made by the Minister moving the first reading of the Bill noting that the new category of treatment injury would:[22]
… remove the requirement to find fault, as is the case with some claimants for medical misadventure, or to prove that a medical injury is rare and severe, as is the case with other claims for medical misadventure, before a patient is entitled to accident compensation cover. This approach is more consistent with the no-fault nature of the scheme. As a result of these changes, more people will be eligible for cover, and outcomes for claimants will be considerably improved.
[22](5 August 2004) 619 NZPD 14695.
Further, in moving the second reading of the Bill, the Minister said:[23]
No longer is there a distinction between medical error and medical mishap. Claimants do not have to demonstrate error or show that their condition is both rare and severe. The new cover provisions provide that treatment injuries are simply ones that result from the treatment. Punitive fault finding is also removed from the processes of the Accident Compensation Corporation (ACC).
[23](3 May 2005) 625 NZPD 20162.
At the hearing in this Court we granted an application by Mr De Groot to produce and address further evidence not placed before the High Court that was subsequently obtained under the Official Information Act 1982. The further evidence consisted of a number of Cabinet Social Development Committee reports and minutes generated as the 2005 amendment was developed.[24] Mr de Groot relied on this material as showing that the Government altered course by deciding not to proceed with a hindsight exclusion as a basis for declining cover under the new treatment injury proposal then under consideration. He submitted the further documents established that government thinking evolved to a position where treatment injury requires only an objective hindsight finding of fact, with cover limited solely by the express exclusions.[25]
[24]We nevertheless note and repeat the reservations about the use of such material that this Court expressed in Skycity Auckland Ltd v Gambling Commission [2007] NZCA 407, [2008] 2 NZLR 182 at [39]–[42].
[25]Under the Act as it stood prior to the 2005 amendment, s 33(4)(b) provided that medical error did not exist solely because subsequent events show that different decisions might have produced better results. An equivalent provision was not included in the 2005 amendment.
Mr de Groot was also able to refer to the following statement in Personal Injury in New Zealand:[26]
It is clear from the parliamentary record in 2004–05 that — consistent with the no-fault nature of the accident compensation scheme generally — Parliament intended there to be no requirement to find medical fault or error before treatment injury cover could be granted. …
It follows that the word “failure” in s 33(1)(d) and (1)(g), and the words “failing to obtain” in s 33(1)(e) were intended to be interpreted in a neutral way. That is, they refer to something which has not happened or worked, for whatever reason. Similar to where treatment has actually been given (s 33(1)(a)), there is no requirement to establish fault or error.
[26]Personal Injury in New Zealand (looseleaf ed, Thomson Reuters) at [AC33.01(3)].
Mr de Groot also drew support from an article of Professor Manning published in Medical Law International, “Plus ça change, plus c’est la mȇme chose: Negligence and treatment injury in New Zealand’s accident compensation scheme”.[27] Professor Manning is critical of a trend she discerns in the case law in which notions of negligence have crept back into the interpretation of the treatment injury criteria. She expresses the view that the purpose of the 2005 reform is in danger of misfiring as a consequence. She considers this needs to be corrected not only to keep faith with the intentions of the reform, but also to maximise provider trust and cooperation in the claims process in the interests of claimants.
ACC’s argument
Text
[27]Joanna M Manning, “Plus ça change, plus c’est la mȇme chose: Negligence and treatment injury in New Zealand’s accident compensation scheme” (2014) 14 Medical Law International 22.
For ACC, Mr Butler submits that to establish a “failure to provide treatment” under s 33(1)(d), a claimant must show that an alternative treatment that would have prevented the injury suffered both could and should have been given (in preference to the treatment course that was taken), according to the clinical indications in the circumstances.
Mr Butler argued that the words “failure to provide treatment” used in s 33(1)(d) strongly imply a departure from a standard, as Gendall J held in the High Court.[28] He referred to the Concise Oxford English Dictionary definition of failure as, relevantly, “the omission of expected or required action: their failure to comply with the rules”.[29] He submitted that the ordinary connotations of “failure”, include “deficiency” and “shortcoming”.[30] Although “failure” can also be defined in more neutral terms, for example as a lack of success, such an interpretation is precluded here by s 32(3) of the Act, which provides that the fact treatment did not achieve a desired result does not of itself constitute treatment injury. On this approach, a “failure to provide treatment” should be interpreted by reference to the standards on which treatment decisions are based, those being what is clinically indicated. Consequently, a failure to provide treatment would only arise where some other available and preferable course to that in fact taken was not provided
[28]Accident Compensation Corporation v Adlam, above n 3, at [36].
[29]Angus Stevenson and Maurice White (eds) Concise Oxford English Dictionary (12th ed, Oxford University Press, Oxford, 2011).
[30]Citing Gerry Breslin and Lorna Gilmour (eds) Collins English Thesaurus (HarperCollins, Glasgow, 2013) at 314.
Mr Butler referred to various contextual considerations that he submitted reinforce this conclusion. Importantly, the definition of “treatment injury” in s 32(1) requires not only that the personal injury be suffered,[31] but also that it be “caused by treatment”[32] and “not a necessary part, or ordinary consequence, of the treatment”.[33] Mr Butler submitted that, in the case of a failure to treat, some other course would need to have been clinically indicated before it could be said the failure had caused injury.
Purpose
[31]Accident Compensation Act, s 32(1)(a).
[32]Section 32(1)(b).
[33]Section 32(1)(c).
Mr Butler submitted that the purpose of the 2005 amendment was to address problems identified with the previous medical misadventure provisions, under which cover was available in cases of “medical error” and “medical mishap”. The former required proof that a registered health professional had failed to observe the standard of care and skill reasonably to be expected in the circumstances.[34] “Medical mishap” by contrast, required proof of an injury that was caused by treatment where treatment had been given properly and the injury was rare and severe.[35] At the time of the amendment ACC was obliged to report findings of “medical error” to the relevant professional body and to the Health and Disability Commissioner, identifying the responsible health professional or organisation by name.[36]
[34]Injury Prevention, Rehabilitation, and Compensation Act 2001, s 33(1) (prior to the 2005 amendment).
[35]Section 34(1) (prior to the 2005 amendment).
[36]Section 284(2) and (6) (prior to the 2005 amendment).
Mr Butler referred to the stated purpose set out in the explanatory note to the Bill of the 2005 amendment, which referred to reducing the impact and incidence of medical injuries by “building a partnership with the health sector that”:[37]
·moves away from the punitive system of finding medical error and reporting medical misadventure cover decisions:
·gains the co-operation of the health sector to participate in the claim process, to support claimants to make claims and to provide necessary medical reports and advice to ACC promptly:
·supports and acts as a catalyst for quality/learning initiatives in the health sector:
·helps maintain the safety net through reporting cases where there is a risk of harm to the public.
[37]Injury Prevention, Rehabilitation, and Compensation Amendment Bill (No 3) (165-1) (explanatory note) at 2.
Mr Butler submitted that to achieve those purposes, the 2005 amendment:
(a)replaced cover for medical error and medical mishap within a single overarching framework of “treatment injury”. This abandoned the requirement to attribute blame and for injuries caused by treatment to be “rare” and “severe”;
(b)replaced ACC’s reporting requirements with a broader obligation to report a risk of harm to the public where ACC believes such a risk exists from information collected in processing claims;[38] and
(c)repealed the provisions that enabled health professionals to challenge medical misadventure decisions given that they were only necessary where blame had to be attributed to individual professionals in order for a claimant to obtain cover.
[38]Accident Compensation Act, s 284.
He submitted that the amendment did not reduce the relevance of clinical indications to treatment injury determination, as an analysis of the text showed. He drew a distinction between the attribution of blame to individual professionals and determining whether treatment accorded with what was clinically indicated in given circumstances. By retaining the relevance of clinical indications, Parliament allowed for injuries caused by treatment to be assessed against known criteria for the purposes of determining cover. There was still an obligation on a claimant to show that medical intervention had caused a particular injury although the need to attribute blame for that injury had been removed. The focus moved from finding fault with the conduct of the health professionals involved to a focus on the sufficiency of the treatment the patient had received.
Analysis
The drafting of ss 32 and 33 means that both must be applied together for the purpose of ascertaining whether a person has suffered a treatment injury. A treatment injury must involve some act or omission that has a causative effect in producing the personal injury.
Once an event has occurred that can properly be considered as within one of the paragraphs in s 33(1), it must then be asked whether that event has given rise to a personal injury that qualifies as a treatment injury under s 32(1). And the requirements of s 32(1) are cumulative in the sense that all must be satisfied for there to be a treatment injury. Thus it is not enough for this to be established by pointing to a personal injury that a person has suffered while receiving treatment. It must also be shown that the personal injury has been caused by treatment. Then it must be demonstrated that the injury was not a necessary part or ordinary consequence of the treatment taking into account all the circumstances in which the treatment has occurred.
The way in which a treatment injury arises can be illustrated by considering individual paragraphs in s 33(1). Take first the giving of treatment itself, referred to in para (a). In most cases the application of this provision will be straightforward, but it must be read together with s 32(1)(b) and (c). Assuming s 32(1)(b) is satisfied there will be a personal injury. That then leads to the question of whether the injury suffered was not a necessary part or ordinary consequence of the treatment, taking into account the matters referred to in s 32(c)(i) and (ii). That is a question of fact.
Suppose a drug is administered which, as a result of an unanticipated allergic reaction causes injury. It is clear that there has been treatment injury. The injury was plainly not the ordinary consequence of the treatment, which would never have been administered had the consequence been anticipated.
Next, take the case of a nerve cut during surgery, the nerve being in an unanticipated position. That will be covered because there could be no argument that the cutting of the nerve was an ordinary consequence of the surgical procedure undertaken.
In both these kinds of case the factual issue raised by s 32(1)(c) can easily be answered. There is no doubt what has occurred is not a necessary part of the treatment. In other cases the issue may not be so easily determined.
Another kind of case may involve a course of treatment properly embarked upon, but badly carried out. Taking as an example a surgical procedure that could be carried out in a way that does not cause a particular injury; the surgeon attempts the procedure but nevertheless causes the injury. Whether there has been treatment injury depends on a conclusion that the operation ordinarily could have been carried out without causing the injury. In other words, the operation was not performed as it should have been. In this kind of case, establishing the injury was not a necessary part of the treatment involves showing that there was a better way of going about the treatment. In any given case there might be a factual dispute about this, and resolving the dispute in favour of cover depends upon showing a proper standard was not met. So, establishing there was a treatment injury may involve showing that a professional standard has not been met.
A similar conclusion can be reached in the case of treatment injuries based on other kinds of treatment set out in subsequent paragraphs of s 33(1). Take the case of a diagnosis of a person’s medical condition, referred to in s 33(1)(b). For a diagnosis to cause personal injury it must, we think, be a wrong diagnosis. It would be a strange reading of the provision to suggest that it envisaged a correct diagnosis. That would mean that, applying s 32(1)(b), a correct diagnosis had caused personal injury. It seems most unlikely that can have been intended. We consider it much more likely that the intent was to embrace misdiagnosis. This too connotes a departure from a standard: a standard that would have been met had a correct diagnosis been given.
We consider next s 33(1)(c). This refers to a decision on the treatment to be provided. Once again, we think the statute must have in contemplation an incorrect decision as to the treatment to be provided. A correct decision about the treatment to be provided cannot logically result in treatment injury because, if there is any injury as a consequence of the decision, it will notionally be injury that is a necessary part or ordinary consequence of the treatment. Were that not so, the wrong decision on the treatment to be provided would have been made. In that case, any treatment injury resulting from acting on the decision about the treatment to be provided would be injury caused by the way in which the treatment was administered, and not the result of the decision on the treatment itself. There would be a treatment injury arising from the giving of the wrong treatment.
Again, we think this provision turns on the correctness of the decision on the treatment to be provided and that necessarily incorporates a standard. If the right decision on the treatment to be provided is made, that decision will not be the cause of any personal injury that results.
This brings us to s 33(1)(d): “a failure to provide treatment, or to provide treatment in a timely manner”. It is clear that the word “failure” relates to both parts of this paragraph: the provision refers to both a failure to provide treatment, and a failure to provide treatment in a timely manner.
A point that can then be made is that the reference to provision of treatment in a “timely manner” of itself necessarily incorporates a standard. It involves a judgment that something was not done as soon as it should have been done. This must turn on some standard that can be referred to in order to make the judgment. It is inherently unlikely in our view that “failure” in this context was intended to connote only the simple idea that the appropriate treatment was not given earlier; to say in this context that something was not done in a timely manner involves a judgement that it should have been done earlier.
If that is right, we consider a similar approach must be taken to “failure” in the first part of the paragraph. Here, the standard is not established by reference to timing but simply by reference to a step not taken. In this setting, we consider a standard must again be involved as a reference point. In order for there to be a failure to provide treatment, we consider there must have been some indication at the time of the failure that the treatment not provided should have been provided. Unless that approach is taken it is difficult to see how there could be a relevant failure to provide treatment that caused the personal injury.
Mr Butler emphasised that the words “caused by treatment” in s 32(1)(b), read together with s 32(2)(a) (which excludes personal injury wholly or substantially caused by a person’s underlying health condition) show that a failure to provide treatment under s 33(1)(d) on its own would be insufficient to attract cover. A failure to provide treatment must in fact cause injury. Here, Mr Butler relied on this Court’s decision in Cumberland v Accident Compensation Corporation.[39]
[39]Cumberland v Accident Compensation Corporation [2013] NZCA 590, [2014] 2 NZLR 373.
In that case, this Court said that on a “traditional” or “standard” approach to causation, in a case where it is alleged that a failure to diagnose has resulted in personal injury, the relevant question to ask is whether “if the diagnosis had been properly made, and proper treatment had followed, was the patient more likely than not to have recovered”.[40] The Court proceeded on the basis that for a failure to be causative of injury, it was necessary to prove on the balance of probabilities that an alternative treatment that would have prevented the injury would have “actually taken place”.[41] Mr Butler argued that an alternative treatment must have been both clinically available and preferable to the treatment in fact given before it could have been said that the injury would have been prevented by an alternative course of treatment. The necessary causal element depends on what is clinically indicated: a course of action that is not clinically indicated could not be said to be available.
[40]At [50].
[41]At [45]–[46].
We accept that argument. As a consequence, it would only be where there was a departure from what was clinically indicated that a failure to provide treatment could be regarded as having caused injury in terms of s 32(1)(b).
Further, it is necessary to bring s 32(1)(c) into account. We agree with Mr Butler that in order to ascertain whether a treatment injury was a necessary part or ordinary consequence of treatment, it will often be necessary to consider clinical indications relevant to the treatment. In our view, if treatment is not provided, in the absence of clinical indications that there should have been treatment, para (c) means that there would be no treatment injury. This, because the injury that followed the non‑treatment would be a necessary part or ordinary consequence of the non‑treatment taking into account the person’s underlying health condition and the clinical knowledge at the time. The reference to clinical knowledge at the time is telling. In terms of s 32(1)(c)(ii) not providing the treatment would have been in accordance with the clinical knowledge at the time.[42]
[42]We note that in McEnteer v Accident Compensation Corporation [2010] NZCA 126, [2010] NZAR 301 at [20] this Court held that the question whether an injury that occurred during surgery was a necessary part or ordinary consequence of the treatment was to be answered on the basis of expert opinion given that reflected on what had actually occurred, not in the abstract.
Further, as Mr Butler submitted, an assessment of what was an ordinary consequence of treatment must involve reference to the expected outcome of treatment given in accordance with proper medical practice. The fact that s 32(1)(c) refers to the underlying health condition of and clinical knowledge about the patient as matters to be taken into account to judge whether the injury was not a necessary part or ordinary consequence of treatment supports a similar approach to “failure” and “timely” in s 33(1)(d).
It is also the case that non-treatment results in the development of a person’s underlying health condition, which is excluded from the definition of treatment injury by s 32(2)(a). In the absence of clinical indications for treatment of the underlying condition we do not think it can be said that the resultant injury is a necessary part or ordinary consequence of the non-treatment taking into account the person’s underlying health condition at the time.
It is not necessary for present purposes to discuss every paragraph in s 33(1), but we mention s 33(1)(g) because Mr de Groot relied on it as another example of the legislature providing for failure simpliciter, without reference to a standard. Unlike the other paragraphs in the subsection, the focus of para (g) is on the failure of equipment, and not the actions of health professionals. But we do not think it accurate to regard it as providing for failure simpliciter. Machines are designed to fulfil particular purposes. If they malfunction they have failed to do what they were designed and intended to do. What they are designed and intended to do is the standard not met and failure is assessed in terms of that standard. This is another example of the standard simply being implicit in the legislative idea being expressed.
The foregoing analysis, focused on the text of the relevant statutory provisions, leads us to reject Mr de Groot’s arguments. We are not persuaded that the interpretation of the particular statutory provisions relevant to this case should be influenced by the provisions elsewhere in the Act on which he relies as examples of where the legislature had included an explicit reference to a relevant standard. In the present case, a departure from what should have been done is inherent in the combination of ss 32 and 33 for the reasons we have given.
In the result, we consider the relevant provisions properly construed mean that in order for there to be treatment injury as a result of a failure to provide treatment it is necessary to show that an alternative treatment that would have prevented the injury suffered could and should have been given having regard to the clinical indications at the time of the alleged failure.
Taken as a whole the provisions indicate a legislative intent to limit cover for persons who suffer injury while undergoing treatment, rather than providing cover for all those who suffer. The injury said to be a treatment injury must be the consequence of a departure from appropriate treatment choices and treatment actions. The drafting could have simply provided for cover for all injury suffered while a person undergoes treatment. But that course was not taken. Rather, boundaries were set out that have the effect of limiting the availability of cover for injury during treatment. A failure in the sense of omitting to take a step required by an objective standard is necessary.
We are not persuaded there is necessarily any inconsistency between these conclusions and the various policy considerations on which Mr de Groot relied. For example, we do not consider the Hansard extracts to which he referred justify the claims made about the intent of the legislature in passing the 2005 amendment. It may accurately be said, as the Minister claimed, that a consequence of the amendment was that ACC was no longer obliged to make findings of fault, but that is not the same thing as saying that ACC does not have to be satisfied that an alternative course was available that should have been pursued. Similarly, with respect to the additional materials on which reliance was placed in this Court, while we accept that they indicate an intention to remove the previously applicable hindsight exclusion we do not accept that is conclusive for the interpretative exercise we are required to undertake.
In any event, Mr Butler properly relied on the content of the explanatory note when the 2005 amendment was introduced. The conclusions we have reached are not inconsistent with the relevant policy aim of moving “away from the punitive system of finding medical error and reporting medical misadventure cover decisions”.[43] And we consider Mr Butler rightly drew a distinction between the attribution of blame to individual professionals and determining whether treatment accorded with what was clinically indicated in given circumstances.
[43]Injury Prevention, Rehabilitation, and Compensation Amendment Bill (No 3) (165-1) (explanatory note) at 2.
As is always the case, it is necessary to focus on the words Parliament has actually used. It will be apparent from our reasoning that we have discerned a legislative policy that, while not requiring a finding of negligence, still operates on the basis that a treatment injury will only have occurred where there has been some departure from a standard and that departure has caused a personal injury.
There is a clear difference in academic opinion on these issues. Our conclusion is consistent with some of the views expressed by Professor Todd in The Law of Torts in New Zealand.[44] Professor Manning reaches different conclusions, rejecting negligence-based reasoning and embracing the application of hindsight to the assessment of whether there has been treatment injury.[45]
[44]Stephen Todd “Accident Compensation and the Common Law” in Stephen Todd (ed) The Law of Torts in New Zealand (7th ed, Thomson Reuters, Wellington, 2016) 21.
[45]Manning, above n 27.
Professor Todd recognises that while the legislation has abandoned any reference to “mishap” or “error” in the treatment injury provisions introduced in 2005, both concepts may in fact necessarily be involved in a decision as to whether a treatment injury has occurred.[46] He illustrates this by reference to s 32(1)(c), noting that it will require the court to decide whether, in a given case, unwanted side effects of a treatment are necessary or ordinary. Although those questions now replace the previous concept of rarity, the courts must once again “determine whether there has been some kind of mishap justifying coverage”.[47]
[46]Todd, above n 44, at 54.
[47]At 54–55.
Professor Todd also refers to the requirement in s 32(2)(a) that the personal injury should not be wholly or substantially caused by a claimant’s underlying health condition. He writes:[48]
Where there is a failure to treat and the patient’s condition gets worse, or treatment does not alleviate a condition, how do we determine whether the continuing injury is caused by the treatment or by the underlying condition? Seemingly in each case a claimant must establish on the balance of probabilities that treatment, or different treatment, would have improved the patient’s condition or prevented it from getting worse.
[48]At 55.
He goes on to suggest that the now replaced concepts of medical mishap and medical error “implicitly remain highly relevant”, and potentially “cover the ground”.[49] We consider these observations go further than justified by the treatment injury provisions of the Act. A distinction can be drawn between finding that a different treatment course should have been followed and establishing there was negligence. While both conclusions would often happily co-exist, the negligence finding is not one required by the Act. More importantly, we consider an approach focused on negligence reasoning runs the risk of failing to meet the legislative purpose. In some circumstances it may be that a higher standard is appropriate than that captured by the concept of breach of a standard of care if the reference point is simply to skilled and informed practitioners generally operating in a field.
[49]At 55.
Despite her rejection of reasoning based on negligence, Professor Manning recognises that the legislation notionally involves an appropriate standard against which to assess the treatment that has been provided or withheld in the case of particular claimants. In her article referred to above, she says:[50]
…it is entirely logical that, in order to reach a conclusion on whether there has been a failure or delay in diagnosis or treatment causative of injury, one needs to measure what actually occurred against an appropriate benchmark; and to determine what might otherwise have been the course of the patient’s injury, given appropriate treatment or care.
[50]Manning, above n 27, at 36.
We agree. These observations tend to support our conclusion that the decision as to whether there has been a treatment injury will often turn on whether some other course of treatment should have been taken other than the treatment in fact provided or withheld. But on the Court’s approach there must be some indication of the need to take the alternative course before the course taken can be regarded as causing the injury.
Professor Manning goes on to discuss Scandinavian patient schemes under which compensation depends upon whether an injury could have been avoided or prevented. She notes, however, that under those schemes compensation is not contingent on, and no assessment is made of, whether the injury was due to error or negligence on the part of the medical professional. Rather:[51]
The guiding principle used to determine whether or not an injury was avoidable is “the experienced specialist standard”. According to this principle, compensation will be paid for an injury if it can be assumed that an experienced specialist in the field in the circumstances would have acted differently during examination, assessment or treatment, at the time of assessment of the claim, thereby avoiding the injury. The classic fault principle is not relevant.
[51]At 37–38 (footnote omitted).
There was no suggestion of a breach of an experienced specialist standard in this case. There were no observable indications prior to the fever that warranted medical intervention and there were no indications for a different treatment course in the circumstances. We are bound to act on those factual findings, set out in the case stated.
Result
The application to adduce further evidence is granted.
We do not propose to answer all of the questions posed in the case stated. We think it is unnecessary to do so, and there are assumptions behind some of them that in our view would make it unsafe to answer them in the form they have been posed. We think the better course to follow is simply to answer question (a) in the affirmative. The reasons for reaching that conclusion have effectively dealt with the various matters raised in argument, including the key underlying issue as to the proper interpretation of s 33(1)(d).
We answer question (a) of the case stated (was the High Court correct to find that a failure to treat cannot occur in circumstances where there are no indications for a different treatment course?) yes.
The appeal is accordingly dismissed.
The issue of costs was not raised in written submissions or at the hearing. Our provisional view is that this being in the nature of a test case costs should lie where they fall. If despite that indication ACC wishes to seek costs, a memorandum is to be filed on that issue within 10 working days of the judgment. Any memorandum in reply from the appellant is to be filed five working days after receipt of ACC’s memorandum.
Solicitors:
John Miller Law, Wellington for Appellant
Russell McVeagh, Wellington for Respondent
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